The company says it believes the reports could mislead readers about NOVO's legitimate business activities and harm the reputation of New Oriental and NOVO.

New Oriental notes that the NOVO division accounted for 8% and 6% of the revenue for the full fiscal year and FQ1, respectively. The business accounted for an even smaller percentages of profit.

New Oriental says it will execute on procedures designed to deter and penalize inappropriate employee conduct in an effort to promote highest standards of corporate governance and business conduct throughout the entire organization.

New Oriental Education & Technology Group (NYSE:EDU) plunges 14% after Reuters reports that eight former and current employees are accusing the company of college application fraud.

Writing and "polishing up" application essays on the behalf of students is just part of the story, according to the sources. They maintain that in some cases Chinese students don't even see their applications to top U.S. schools such as Stanford and University of Chicago at any point in the process.

Donald Trump hasn't announced his choice to lead the Department of Education yet, but for-profit education stocks have been in a celebratory mood ever since the U.S. election.

The new administration is expected to have a lighter touch with regulations and restrictions on the for-profit sector, an industry the President-elect himself is familiar with after settling a lawsuit filed against Trump University for $25M. There's been some speculation that the DOE will see a major transition over the next four years.

Education stocks rising more than 20% since the election include Strayer Education (NASDAQ:STRA), Universal Technical Institute (NYSE:UTI), Capella Education (NASDAQ:CPLA), Bridgepoint Education (NYSE:BPI), Career Education Corp. (NASDAQ:CECO), Grand Canyon Education (NASDAQ:LOPE), DeVry Education (NYSE:DV) and Chegg (NYSE:CHGG). Many of those names are now at or near their 52-week highs which brings up the question of how far the rally can extend?

New Oriental Education and Technology Group (NYSE:EDU) announced that Beijing New Oriental Xuncheng Network Technology has submitted an application for the listing and open transfer of the shares of Xun Cheng on the National Equities Exchange and Quotations in China.